Correlation Between Aquagold International and Franklin Lifesmart
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Franklin Lifesmart at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aquagold International and Franklin Lifesmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Franklin Lifesmart Retirement, you can compare the effects of market volatilities on Aquagold International and Franklin Lifesmart and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aquagold International with a short position of Franklin Lifesmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Franklin Lifesmart.
Diversification Opportunities for Aquagold International and Franklin Lifesmart
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aquagold and Franklin is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Franklin Lifesmart Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Lifesmart and Aquagold International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aquagold International are associated (or correlated) with Franklin Lifesmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Lifesmart has no effect on the direction of Aquagold International i.e., Aquagold International and Franklin Lifesmart go up and down completely randomly.
Pair Corralation between Aquagold International and Franklin Lifesmart
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Franklin Lifesmart. In addition to that, Aquagold International is 37.99 times more volatile than Franklin Lifesmart Retirement. It trades about -0.22 of its total potential returns per unit of risk. Franklin Lifesmart Retirement is currently generating about 0.1 per unit of volatility. If you would invest 1,044 in Franklin Lifesmart Retirement on November 27, 2024 and sell it today you would earn a total of 6.00 from holding Franklin Lifesmart Retirement or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aquagold International vs. Franklin Lifesmart Retirement
Performance |
| Timeline |
| Aquagold International |
| Franklin Lifesmart |
Aquagold International and Franklin Lifesmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Franklin Lifesmart
The main advantage of trading using opposite Aquagold International and Franklin Lifesmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Franklin Lifesmart can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin Lifesmart will offset losses from the drop in Franklin Lifesmart's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Franklin Lifesmart vs. Ab Bond Inflation | Franklin Lifesmart vs. Gmo High Yield | Franklin Lifesmart vs. Doubleline Emerging Markets | Franklin Lifesmart vs. Ms Global Fixed |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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